The Hindu Business Line : Parties may feel diamond’s cutting edge

The global economic recession is set to make its impact on the Indian elections. When voters cast their ballot to elect their Members of Parliament for Gujarat, one of the issues that will influence them will be the crisis in the diamond industry.

The $17-billion industry has been in decline since last March. There are about 6,500 diamond processing units in Gujarat of which about 4,300 have closed within the last nine months. About three-fourths of the industry’s labour force is now unemployed and, according to Satyendra Singh, a social activist in Surat who has been trying to unionise workers, there have been over 70 crisis related suicides.

Some 90 per cent of the workers are migrants from within Gujarat, the majority coming from Surat, Bhavnagar, Amreli, Rajkot, Banaskantha and Ahmedabad districts — all areas where the crisis will influence the voting. Groups such as the Diamond Workers Union and the Gujarat Vikas Samiti have already called for a boycott of the elections. Political parties have realised they will have to do some serious fire-fighting.

Rahul Makes a Mark

First off the mark was the Congress. On February 14, AICC General Secretary, Mr Rahul Gandhi, addressed about a thousand workers in the heart of Surat’s diamond area of Varaccha in which he positioned the Congress as a party for the aam admi (common man). Pointing out the sops given to the Tata’s Nano project, he said that the State government was focused on the rich and ignoring the poor. The speech was a success, not just because Mr Rahul Gandhi’s presence revitalised the flagging Gujarat Congress but also because he went on an offensive against the big business policies of the Gujarat government.

Realising a quick response was required, the State government announced a relief package for jobless workers on March 1. It included a 2 per cent waiver in farm loan interest for workers who had lost their jobs and turned to farming, besides a monthly stipend of Rs 2,500. The package also offered training in alternative professions such as powerloom weaving, embroidery and automobile repairs. The package was not received well.

The newly formed Gujarat Diamond Federation, an umbrella for the 42 diamond associations, rejected the offer saying it was too little too late. The Federation president asked why the government had ignored the industry even as recently as January when it had held the Vibrant Gujarat Global Investors Summit. The Summit focused on small and medium enterprises but made no mention of SMEs in the diamond industry. The Federation has presented its own list demanding Below Poverty Line cards, halving of the electricity bills of diamond units, housing benefits, free education for their children, and free travel in public buses.

Key election issue

Meanwhile, the Mahagujarat Janata Party (formed by dissident BJP legislators) made the plight of the diamond workersits main poll plank. So popular is this issue becoming that a new party has sprung up based on this. A businessman, Vitthal Gajera, has created the Bharatiya National Janata Dal. Registered with the Election Commission of India, the party will contest 20 of the State’s 26 Lok Sabha seats.

One of the reasons why Gujarat has ignored the workers’ trauma is because Assembly elections are not being held now. The State elections were held two years ago and this time around voters will be electing just the 26 MPs. It is for this reason that the Chief Minister, Mr Narendra Modi, has been trying to project the general economic crisis as a failure of the Central government that has nothing to do with the State. But often voters don’t differentiate between Assembly and Parliamentary issues.

They see their problems of loss of livelihood, interruption in their children’s education and loss of life of family members as the fault of the government. And that, as far as they are concerned is the State.

Related Stories:
Expedite restructuring of loans for diamond sector: Task force
Jewellery exports down 35% in Feb

More Stories on : Gems & Jewellery | Politics | Gujarat

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